HANNITY: All right. I think I figured out the two things you want for Christmas. The Yankees have got to win the World Series and Rudy has got to win the nomination. So, this is an odd election season. Literally, you come out of Christmas and New Years' and you go, we're going to be in Des Moines on the second.

GIULIANI: I guess they're all unique. This one is really unique. It's been going on for a very long time. I think it's going to start very, very quickly, right, before we even know it. And it should be over by the sixth —

HANNITY: Of February.

GIULIANI: Fifth of February? Twelfth, maybe? Something like that? Somewhere around that period of time.

HANNITY: Oh, pretty — much earlier than it used to be.

GIULIANI: It's a long one, but it is about the future of the country. And we've had a lot of concentration on it, I think that's a good thing.

I think it's a good thing that people get a chance to really see candidates, evaluate them and figure out who can lead this country. And who can do a good job of having America better, safer, more secure, more prosperous, more people moving out of poverty, all these things that have to happen in the future.

And most importantly, deal with Islamic terrorism in a way in which we stay on offense and we give ourselves the best chance of prevailing, we're going to prevail eventually but we're going to prevail in the shortest period of time.

HANNITY: You made a lot of those points this week. And I want to get to your speech that you gave in Tampa over the weekend here. — We're 17 days out of Iowa. I mean it's really that close. Then we've got obviously New Hampshire and South Carolina, leading up to Florida the 29th. February 5th is this big Super Tuesday here.

Here is where you stand: You are behind in the early states, doing well in Florida, doing well in the February 5 states. Do you have — if the polls were to unfold exactly the way they are now — and we know they change a lot — would you be happy — or would you be concerned about the momentum that would be building for some of your opponents?

GIULIANI: You want to win every primary, right?

HANNITY: Right.

GIULIANI: So this is how we went into this. You want to win every primary. There are 29 of them, I think. Don't hold me to it. They keep changing! Between now and February 5th, February 6th. So you want to win as many of them as possible. Whoever can win 15, 18 of them is probably going to be the nominee, assuming they're the right 15 or 18. So,we expect — we're going to try in every one of them. We're going to do the best we can. We never expected to win every single one of them. Nobody's ever done that.

So you have to have a strategy that embraces from day one until February 5. And if you lose one, re-group for the next one. Lose another one, depending on how you come in, you have a strategy for the one after. And then losing and where you come in, is also, you know, part of it.

It's no different than the strategy of the past. We've had a lot of these races that have gone down for a month or two — stretched out a little longer, two months of primaries.

HANNITY: Is it harder if you lose them? That an opponent can gain the momentum out of, say, out of Iowa and New Hampshire, and then moving into the states where you have been doing better in the polls. Does that concern you at all?

GIULIANI: No, not really. The thing you look at is, you're not going to win all of them. You have to have a strategy so that you back up whatever finish you have in a particular primary with trying to have a victory in the next one. And the reality is, this is a pretty short segment of time, unlike other primaries, so I think viewers are going to view it as a nine inning game. And I think you're probably going to see — you're going to probably see ups and downs even during that one month period.

HANNITY: You gave a big speech over the weekend in Tampa. You said you are tested, you are ready and now you want to roll up your sleeves. You talked a lot about having met adversity, led in situations that seemed hopeless and dire. You said, "I don't just pray for miracles, I expect miracles. I welcome the opportunity to keep America safe and secure and I welcome the opportunity to restore fiscal discipline."

This was a defining speech for you. You wanted to take it to another level.

GIULIANI: Right.

HANNITY: Why this time and why now and why Florida?

GIULIANI: Well, because we're coming down toward the end of the primary season, really. We're coming into the holidays. There's not going to be much more of an opportunity between now and then to get out a broader message about vision, about the future. And with all the skirmishing that goes on in all these primaries, sometimes you don't have time to set out your vision for the future. So I thought that was a good opportunity to do it.

HANNITY: Yes.

GIULIANI: Sure, Florida is an important state for us. That may have been one of the reasons we selected it. It's probably — some of these things probably seem more calculated than they are. Probably fit into the calendar really well depending on fund-raising and the other things that you do, right?

HANNITY: And where you are —

GIULIANI: — you have to pay attention to, right? So, the reality is, we thought it was a good idea to get towards the future. What — what do you want this country to look like? How do you want it to be when you turn it over to the next president? I find that very, very helpful for setting an agenda. You say to yourself — you're going to be president four or eight years. What kind of country do you want to hand over? Energy independent, on the road to that, much better schools with choice. These are the things I'd want to get accomplished.

Much safer, to the extent you have a really good Homeland Security system built on what we've done so far, and stay on offense against Islamic terrorists and be ready for anything that's thrown at us. We don't know what we're going to have to deal with in the next four years.

HANNITY: When you use the term, "I'm tested, I'm ready now," you're defining yourself against your opponents particularly in this race. I did notice one thing. For example, we had a lot of press about Mike Huckabee's surge in the polls, and he's been under fire since those numbers have gone up.

You've stayed out of the intramural battle with Governor Huckabee and I was a little surprised.

GIULIANI: You shouldn't be.

HANNITY: Why?

GIULIANI: If you watched my campaign all throughout, I have never attacked another Republican. I have said I follow the 11th Amendment. The only time it might appear that way is if somebody attacks me. Then I have to answer —

HANNITY: Like the exchange with Governor Romney —

GIULIANI: Sometimes you have to answer and make a comparison, and say, you know, this person is attacking me on this, when in fact they don't have a perfect record on this, either. Their record may be worse than yours and that's maybe why they're raising it. And so I have tried to stay out of that.

And the only time there has been any engagement like that is if some Republicans points to some aspect of my record and goes after it in a way that I think either is untrue or unfair or that we were facing the same realities and maybe somebody else has a record that isn't even as strong as mine or weaker than mine or something like that.

HANNITY: Well, a lot of issues have come up, not a few, with him. The issue of pardoning of convicted murderers, clemency, parole, immigration, taxation. He said this weekend, talking about the Bush administration's...

GIULIANI: Right.

HANNITY: ...foreign policy, that it's a go-it-alone, arrogant bunker mentality philosophy. Is it legitimate, do you think — you know, that's work engaging in a debate with him about?

GIULIANI: Everything is legitimate in politics. The question is, on those things that you asked me, my perspective on that it is not particularly helpful. It's going to be a partisan perspective. It's going to be from my point of view. If Mike or anybody else were to attack me, then of course I would answer. That is what I am in the best condition to do, to answer what somebody else raises about you.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

HANNITY: You've mentioned on the campaign trail a lot — it has come up a lot on the debate — you've taken on Hillary Clinton in a pretty forceful way on a lot of occasions. What do you make of the fact that she's plunging in the polls?

She had a huge lead in Iowa, New Hampshire, South Carolina. She is now losing in polls in all three of those states and this big surge of Barack Obama. Do you think things have changed? Do you think he could win this?

GIULIANI: Sure. Sure he could win. I still think Hillary will probably win it, but I think it's nowhere near the sure thing that it seemed to be two months ago. It probably never was a sure thing. These races get very, very close. Senator Obama has been, on the Democratic side, a very exciting candidate. He has raised a lot of money, which always makes a candidate a candidate that has a good chance. But Democrats are going to make their choice. I sure don't know who they're going to pick, but it looks like that one is going to go down to the wire, also.

HANNITY: Yes, it seems like — what do you make of — I think we've been able to glean a little bit out of how Hillary would run in a general election, in as much as going back to the kindergarten years of Barack Obama, which was becoming a big issue. She had a surrogate on the campaign attack him and lay the foundation or the suggestion that Barack Obama — well, the question needs to be raised, was he dealing drugs?

It seems like the politics of personal destruction. Even John Edwards was disgusted, in a comment he made this weekend, about the tactics of Hillary against Barack Obama.

GIULIANI: Yes, I think those tactics — I think the American people are turned off to that. I really do. And I think particularly within party primary.

I mean the reality is that most Republicans, most Democrats like most of the people that are running. And when they hear these kinds of negative attacks, it's kind of counter-productive. If you have to do it, then you should do it as a comparison, compare your record to somebody else's. But to go out of your way to do these attacks, I think is harmful.

But you know, everybody's got to run their own campaign.

HANNITY: One ad in "The Politico" this morning says you might be pulling out some ads in New Hampshire. Is that true? You're cutting back your buys in New Hampshire? What should people read into that?

GIULIANI: Sure, they make those decisions. It's based on proportionate strategy. From the beginning, our strategy has been we've got to win as many of those — originally we were talking about only 20 primaries, but now as many as the 29 primaries that come up between now and February 5th. And we do see it as a nine inning game. So you're going to see money moving around.

You may see more money going back in one place, like in New Hampshire. You may see some of it go to Florida. You may see some of it go to February 5th states. Gosh, all that calculating I don't have time for. I do 14, 15 hours a day. They sit their with all these meters and numbers and this moves by three percent, so you move a little here and you move a little there.

And you know, you find out at the end if that strategy is the right strategy.

HANNITY: What do you say to people — if the polls held where they are in Iowa and New Hampshire now. You didn't win those states. What do you say to your supporters, because there'll be a lot of press about who the winner is?

GIULIANI: Right.

HANNITY: What do you say to them, well wait a minute, we expected we weren't going to win them all, because — and you worry — I go back to the question of momentum. How do you stop the momentum as you head into states where you're showing more strength?

GIULIANI: You campaign in those states with the idea that they make their own decision. Each one of these states makes their own decision. They have their own things at stake. Many times we've seen situations where somebody's won Iowa, lost New Hampshire, won another state, lost the next one after that.

There is a certain thing to momentum, and then there is a certain thing in a state wanting to make its own statement, wanting to stand up and say, this is my candidate; this is the candidate that I agree with; this is the one I think can win.

Even during the primary, as we've seen — as the primaries are going on, as we've seen people go up and down, that happens in the middle of primaries.

HANNITY: Yes. There was one article that was on the Drudge Report this week, "Democrats Hold Fire on Huckabee, See Easy Kill in the General Election."

I don't know if you have time when you're —

GIULIANI: I didn't read that particular — no one knows who is going to be the best candidate in the general election. I believe I can win. I believe I am the strongest Republican candidate to be in the general election and it isn't just because of general election numbers, which are good, but still, it's because of states. Because I can put more states in play then all of my opponents can. And I think I can put maybe 10 states in play that my Republican opponents can't put in play against, whether it's Hillary or Barack Obama.

HANNITY: Who do you think would be the stronger candidate and what do you see as their strengths and weaknesses in both cases.

GIULIANI: I think you have to look at — you put either up as a candidate and then you put up the sure states, the debatable states and the states that they're going to lose. It's pretty much the same. Maybe a state or two changes here or there for Hillary Clinton or Barack Obama.

Look, you know, I think they are both very tough candidates. She has a terrific organization. She is very experienced. He has shown tremendous enthusiasm drawn to him. That's a different kind of thing you're dealing with. Either way, we have different issues against one or the other and they have different pros and cons. I don't think you can tell. The Democrats aren't going to listen to me on who I think would be the stronger candidate. They think I might be trying to mislead them if I say something.

HANNITY: Anyone you'd prefer to go up against?

GIULIANI: No. You can't do that. Any more than you can prefer —

HANNITY: Well the Yankees, sometimes, I think would prefer to take on Boston.

GIULIANI: And sometimes when you do, the one you get is the one that beats you.

HANNITY: That's true.

GIULIANI: You've got to watch out. The same thing is true in the primary. You want to be standing when you get down to February 5th and probably, there are going to be only one or two other people standing with you. So you don't get to pick that.

Who knows what's going to happen in these primaries? I tend to think there are going to be a lot of surprises.

HANNITY: Mr. Mayor, thanks for being with us.

GIULIANI: Thank you.

HANNITY: Appreciate it. Have a good Christmas.

GIULIANI: Merry Christmas.

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